United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR EGYPT (of Counsel) Instructed by: Messrs Cain & Abel Law Firm 52 Trafalgar Avenue LONDON SE15 6NR
For the Respondent	MR BARNETT (of Counsel) Instructed by: Messrs Gregsons Solicitors St Christopher's House Tabor Grove Wimbledon LONDON SW19 4EX

SUMMARY

Practice and Procedure - Amendment

Employment judge refused an amendment on paper which raised fresh claims of race and sex discrimination out of time. However, he did not bar the claims altogether but advised the claimant to lodge fresh claims so that the Tribunal would consider whether it was just and equitable to extend time. The claimant appealed and the EAT upheld the appeal. The EAT held that although it was unlikely that in practice it would matter whether the Tribunal treated the claims as an amendment to which it had to apply the test adopted in Selkent Bus Company v … or as fresh claims to which it had to apply the just and equitable test to see if they could be allowed out of time, strictly the employment judge ought not to have refused to treat the application as one for amendment.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

Background.

1. The claimant commenced employment on 1 April 1994. She began to make some allegations of discrimination it appears in 2002. She lodged an internal grievance on 14 October 2004 which was heard in December of that year. Further grievances were lodged in January 2005 and again after her dismissal.
2. She was dismissed on 11 July 2006. She lodged an appeal against that dismissal six days later on 17 July and when that was unsuccessful she lodged her claim for unfair dismissal on 4 October 2006. That was just within the three month period.
3. Her health appears to have deteriorated around December of 2006. She instructed a law firm on 2 February 2007 and they intimated for the first time on 16 February 2007 that she intended to amend her existing claim. She was pregnant and under stress at the time.
4. The hearing of the unfair dismissal claims were adjourned and the amendments were not in fact lodged until 1 August 2007. They do constitute a very significant change from the original claim. That identified no discrimination issues at all. It does say that the claimant was victimised and harassed, but it does not relate that treatment to either race or sex discrimination. The amended claim identifies some forty acts going back to 2002 of alleged race and sex discrimination.
5. The respondent sent a letter to the Tribunal objecting to the amendment, and requesting that they be heard.
6. By a letter dated 29 August the claimant's solicitors indicated that although it would not object to the matter going for an oral hearing, it considered that the Tribunal had enough information to deal with the matter without a hearing and that it may be desirably in costs terms to do that.
7. The Tribunal listed the amendment application for a hearing on 11 October 2007 in what appears to have been a pre-hearing review. However, the claimant was not able to attend because of ill health and she sought an adjournment. The employment judge then granted that adjournment but at the same time he made the following Order, which was notified to the parties by letter dated 10 October:

"The Chairman …. requests the claimant files a fresh ET1 which can be considered as having been presented on 1 August 2007 setting out the various discrimination claims. The respondent will no doubt take a time point, bearing in mind the claim was presented over twelve months from the date of termination."

8. That is the sole decision which is under consideration in this case. The claimant sought a review of that decision but that was refused by a letter dated 30 August. The employment judge noted that all the arguments as to whether the amendment should be permitted would be heard by the tribunal when it considered whether it was just and equitable to extend time for lodging the fresh claim.
9. A further review was made to another employment judge, the first one having retired, but she considered that it would not be appropriate for her to carry out a review since she did not make the original decision and she advised the claimant to pursue an appeal which they had indeed already lodged.
10. There is an important feature of this case which in my judgment needs to be borne in mind. The employment judge has rejected the amendment. Normally that would mean that it is not possible for the claimant to pursue the amended claim at all, but that is not the effect of this decision. The claimant is left with the right to have the new grounds considered by a tribunal but subject to the question whether she should be allowed to advance them, their having been lodged well out of time. As the employment judge noted, it would be for the tribunal hearing this aspect of the case to determine whether in all circumstances it was just and equitable for the claims to be heard.

The Law.

11. The leading case for determining when amendments should or should not be allowed is the decision of the EAT (Mummery P presiding) in Selkent Bus Company Ltd v Moore [1996] IRLR 661. Mummery P distinguished three types of amendments. The first involved simply correcting clerical and typing errors; the second involves the addition or substitution of other labels for facts already pleaded to; and the third involves a case where a substantial alteration is made pleading a new cause of action.
12. Mr Egypt, counsel for the claimant, realistically accepts that the proposed amendments here fall into the third category. The sex and race discrimination claims did not feature at all in the original unfair dismissal application.
13. Plainly, these new claims are out of time. That is one of the features which Mummery P indicated would have to be considered when determining whether or not to permit the amendment. He said this at para 23:

"If a new complaint or cause of action is proposed to be added by way of amendment, it is essential for the tribunal to consider whether that complaint is out of time and, if so, whether the time limits should be extended under the applicable statutory provisions…"

In this case, of course, those provisions permit an extension in cases of race and sex discrimination if it is just and equitable to do so.

14. Further considerations to be considered when determining whether or not to amend were set out by Mummery P in the following terms, (para 24):

"(c) The timing and manner of the application

An application should not be refused solely because there has been a delay in making it. There are no time limits laid down in the Rules for the making of amendments. The amendments may be made at any time – before, at, even after the hearing of the case. Delay in making the application is, however, a discretionary factor. It is relevant to consider why the application was not made earlier and why it is now being made: for example, the discovery of new facts or new information appearing from documents disclosed on discovery. Whenever taking any factors into account, the paramount considerations are the relative injustice and hardship involved in refusing or granting an amendment. Questions of delay, as a result of adjournments, and additional costs, particularly if they are unlikely to be recovered by the successful party, are relevant in reaching a decision."

The grounds of appeal.

15. The argument has shifted significantly in the course of this hearing. There were initially three grounds of appeal, and I will deal with them very briefly because, with due respect to Mr Egypt, they do not sustain this appeal in my view, nor do they directly grapple with his real concern.
16. The first ground of appeal is that the test laid down in Selkent must now be reconsidered in the light of the fact that claimants are encouraged, indeed obliged, to pursue grievances with the employer. In this case one of the reasons, Mr Egypt submits, why the claimant did not lodge her claims in time was that she was waiting for a number of grievances she had lodged to be resolved. He contends that the failure by the employer to deal timeously with these matters ought to be a factor which weighs against them when determining whether or not to allow an amendment.
17. There is no doubt that the question whether a grievance has been lodged and/or determined is potentially a relevant factor for a tribunal to take into consideration when determining whether to extend time on the just and equitable test: see Apologun-Gabriels v London Borough of Lewisham [2002] IRLR 116. The Court of Appeal accepted that the fact that a grievance was being pursued was one factor to take into consideration, but rejected the contention which had been accepted in the earlier EAT case of Anaigwu v London Borough of Hackney [1999] IRLR 303 that it would always be just and equitable to extend time where such grievances were being pursued. I have no doubt that the same factor would weigh with a tribunal when applying the Selkent principles to proposed amendments.
18. Here, however, the claimant can still run these arguments in the tribunal when considering whether time should be extended. Accordingly, the decision of the employment judge has not in fact prevented this argument being advanced. Mr Egypt contends that the consequence of the new disputes procedures is that more weight should be given to this factor than hitherto. That may be so, but whether it is so or not, that also is an argument which can be advanced whether the issue before the tribunal is whether time should be extended for a fresh claim or whether an amendment should be permitted.


19. The second ground of complaint was that the decision was taken without an oral hearing. There is no doubt that under the Tribunal Rules it is lawful at least at the initial stage to make an amendment at an oral hearing. Rule 12 in terms provides that an employment judge may act on his own initiative and make an order without hearing the parties or giving them an opportunity to make written or oral representations. A party affected may then apply to have the order varied or revoked under Rule 12(2).

19. Similarly, under Rule 11 it is plain that orders may be issued, varied or revoked without oral hearings.
20. In the Selkent case Mummery P pointed out that it is perfectly proper for tribunals to deal with hopeless or uncontroversial applications without seeking representations from the other side. However, Mummery J did also observe (para 13) that the power to amend is no exception to the principle of natural justice. Normally I would not expect a refusal of an amendment to be made without an oral hearing. However, there were two unusual features here. The first was that the claimant made it clear that she was not concerned to have an oral hearing; it was the respondents who were pressing for that. The second and more important factor was that in any event, as I have said, the employment judge was not defeating the rights of the claimant to make all the observations she wished with respect to her attempt to bring these fresh claims. He was simply altering the context in which those arguments could be advanced. In those circumstances I do not think that the failure to allow an oral hearing of itself invalidated his decision.
21. The third ground is that it is said that the employment judge reached a perverse decision. That is an impossible conclusion to advance in circumstances where the employment judge gave no reasons and no reasons were requested. It is not possible to contend that he failed to take into account relevant considerations or took into account irrelevant matters when there is no clear indication of what factors weighed with him at all.

A fresh issue.

22. However, a further issue emerged in the course of the hearing. My provisional view was that since this claim was raised by way of amendment, it should have been considered in that way. There seemed to be little purpose in requiring that the claims be treated as fresh claims which, if they were permitted to be advanced, would then inevitably be consolidated with the existing unfair dismissal claim in any event. They could be treated simply as an amendment to an existing claim.
23. At the same time I raised the question whether it made any practical difference to the claimant whether her claims were considered in the context of an application to amend or on the basis that there was a fresh claim for which time would have to be extended. In whichever context the claims arise, it is plain, as Mummery P stated in terms in Selkent, that amendments involving the making of new claims out of time rendered it necessary for the Tribunal to consider whether the time limit should be extended under the relevant statutory provision. If it makes no difference, then the appeal is moot.
24. Both counsel accept that in some cases the test to be applied may have different consequences depending upon the statutory provision under which time can be extended. The approach adopted in the Selkent case, which I will refer to as the "balance of injustice and hardship" test is different to the language of the statutory extension powers, whether they be the "just and equitable" formula, as in this case, or the "reasonably practicable" test adopted in unfair dismissal cases.
25. However, Mr Barnett pointed out that in practice there is no reason at all why the just and equitable test cannot in the context of an amendment achieve precisely the same result as the balance of injustice and hardship test. The just and equitable test requires a consideration of all the circumstances of the case. In Hutchison v Westward Television Ltd [1977] IRLR 69 the EAT (Phillips P presiding) observed that this entitled the Tribunal to take into consideration "anything which it judges to be relevant." That is redolent of the language of Mummery P in Selkent when he said that account of all the circumstances should be taken into account in the balance of injustice and hardship.
26. The identical nature of the tests was confirmed by the Court of Appeal in Ali v Office of National Statistics [2005] IRLR 201. The issue in that case was whether a claimant needs leave to amend his claim if he has raised an issue of direct race discrimination and wishes to advance a claim of indirect discrimination also. The Court of Appeal held that he did. They stated, however, that the test was whether it was "just and equitable" to allow the amendment. Waller LJ referred to the question whether it was this or the balance of injustice and hardship test which should be adopted and described the issue as "sterile". He said that it was "impossible to think" that the result would be different whichever test was adopted. Chadwick LJ took an equally robust view, finding it "difficult to conceive" of circumstances where it would lead to a different result.
27. Mr Barnett accepts that there may be circumstances where the balance of injustice and hardship may lead to a different result to the reasonably practicable test. That, he submits, is the basis of the decision of the EAT (Underhill J presiding) in Transport and General Workers Union v Safeway Stores Ltd (UKEAT/0092/07). In an impressive analysis of the relevant authorities, the EAT concluded that the Tribunal always has a discretion to allow an amendment to permit a claim to be made out of time (including any legitimate extension). In effect, the relevant test changes in the context of an amendment.
28. In my judgment this demonstrates that the employment judge was wrong to remove this case from the amendment context and to place it under the rubric of extension of time. I fully accept that in this case there is unlikely to be any practical difference whichever test is adopted, as the Ali case shows, but that is because in the context of applying the just and equitable criteria, Mr Barnett accepts that the Tribunal would have to recognise that the new claims were being advanced by way of adding discrimination claims to an existing claim for unfair dismissal. That would in all but form be treating the issue as one of amendment.
29. Moreover, since it is plain that the claims should be treated as falling under the amendment rubric when the courts must consider whether or not to allow out of time amendments where the reasonably practicable formula is in issue, then in my view it must in principle be the same where the just and equitable principle is the appropriate formula for extending time. The effect may be the same whether the tribunal is considering a fresh claim or an amendment, but I think that treating the issue as one of amendment is more likely to assist the tribunal to appreciate the potential range of relevant factors. That was in essence the principal reason why Mr Egypt wanted the employment judge's decision to be overturned.
30. I should add that Mr Barnett fairly observed that it may be that the onus of proof is different where the issue is simply whether a fresh claim is to be heard out of time rather than where the issue is where the balance of hardship and injustice lies in determining whether or not to make an amendment. He suggested that in the latter situation the onus of proof was at least arguably neutral given that a balancing exercise is involved. I suspect that strictly the onus remains on the claimant there too, but I would accept that there may be a small difference in perception as to how difficult it is to discharge that onus, deriving from the differently worded tests. This factor does, therefore, lend some support for my conclusion.

Conclusion.

31. On this very narrow ground, I would uphold the appeal. The employment judge should have allowed the application to proceed on the basis that it was being advanced as an amendment rather than as fresh claims. The matter must now be remitted to a fresh tribunal to consider the issue again, having regard to all relevant circumstances.